The Welsh Government has spent more than a £100m a year on economic programmes which have delivered “next to nothing”, the former head of the scrapped Welsh Development Agency told MPs today.

Sir Roger Jones this morning called for the creation of a “smaller, more focused and independent body” which would be controlled by a private sector board with strong trade union representation.

Sir Roger told the Welsh Affairs committee in his evidence: “Despite being probably the best known and most effective industrial development agency in Europe , the Welsh Government saw fit to disband the WDAin 2006, and transfer its function to the civil service in Wales.

“My pleadings at the time went unheeded. I stated publicly that it would take three more years to implement change.

“This would sentence Wales to nearly ten years in the wilderness in terms of industrial development. To this day, I stand by my prediction.

“We have seen expenditure in excess of £100m per annum that has produced next to nothing in the form of outcomes.”

Describing the consequences of merging the WDA with the Welsh Government’s civil service, he continued: “The single factor which differentiates the public and private sectors is the propensity to take risks. The public sector is risk averse, as is the majority of its hierarchy.

“A profit is nothing more than a reward for taking a risk. If the system demands a completeness of information prior to a decision, it will probably take too long and the opportunity will have passed.

“The WDA was successful because it insulated politicians and civil servants from risk. In its heyday, probably 50% of its employees were inward facing, providing levels of comfort at the interface with Government. The other half were managing the interface with the private sector.

“Simplistically and possibly accurately, the public sector were seen as the wealth destroyers and the private sector as wealth creators. In the post-WDA era, it became evident that the management controls which were applied made the interface with the wealth creators dysfunctional.”

Admitting that many of the WDA also attracted intense controversy, he said: “The WDA was far from perfect. There were areas of dysfunctionality particularly in overseas representation, mostly due to poor selection of individuals for overseas positions.

“The imperative to have a spread of offices in all continents was flawed. The concept of being a ‘one stop shop’ for all industries was flawed.

“There was insufficient selectivity in the technologies sought, and poor integration with universities in Wales despite some heroic efforts. There was too much emphasis on the role of grants.

“It is the availability of skills and markets that create jobs.”

He went on: “On reflection, the absence of a strategic vision at ministerial level was debilitating. The driver was the safety of the civil service position, not the outcomes in terms of wealth creation.

“The board of the WDA was never able to transcend the relative inexperience of its paymasters.”

However, Sir Roger was adamant that the present situation could not continue and argues a body with an annual expenditure of £50m, to include £10m of initial marketing spend, could deliver real results.

He said: “Trapped with GDP per capita at around 75% of UK average, the status quo is not acceptable. Some kind of arm's length agency is essential if industrial development is to be achieved.

“This has to be in position by the time the economy starts to recover.”